Posts Tagged ‘deregulation’

History has shown us that liberal governmental economic policy does not help the economy (the New Deal, Jimmy Carter). Well, let’s see what it was that they did.

Conservatism was weak in the 1920s and panic lead the nation from recession to depression.

The New Deal (which extended the Great Depression years) created government jobs, taxed the rich, and tryed to control the economy through central economic planning. He ended the gold standard, forever inflating the dollar. He set minimum wages and prevented people from working more than so many hours a week. He also created the now infamous Fannie Mae.

The result of the New Deal was… nothing. The unemployment rate lurched between 13%. and 24% until WWII.

Carter, on the other hand, tried to control the free market indirectly. He cut imports on foreign oil. His attempts to control the United States energy resulted in the still-remembered fuel-shortages. Carter essentially ruined the economy.

Reagan, on the other hand was successful at economic recovery. With large tax cuts and deregulation, he brought down inflation and unemployment.

History seems to speak against Obama, whose policies (government jobs and central economic planning, as well as regulation) resemble Roosevelt’s and Carter’s. Their policies failed.

As George Santayana once said, “Those who cannot remember the past are condemned to repeat it.”

While others may blame Bush for this recession, I will take the time to analyze the many factors causing this recession.

Gas Prices

Gas prices surged in the middle of the 2000-2009 decade. The increase in the price of oil increases the price of everything, as oil moves things from place to place. The fault of the rising prices goes to OPEC. The United States never joined OPEC and therefore has no say in it. To make a larger profit, these countries increased the price of oil exports. Local oil companies didn’t have the resources to compete in production, and were forced to buy this foreign oil at a high price.

In countries that don’t allow any drilling on their soil, such as England, people pay more than twice what the United States pays. Further, in countries such as Saudi Arabia, gasoline is sold for about a quarter a gallon. Ladies and gentlemen, there is an easy observation to make: countries that drill more and import less from OPEC have lower gas prices.

So, this first factor can be contributed to liberalism and the green movement, which continually attack oil production. There is no solution to dependence on oil; wind will never power a car (picture a car pulled by a sail) and the sun will never power a vehicle (the solar powered cars cost millions of dollars and can only travel about fifty miles per hour). Cars will never run on batteries or any form of electricity either. Battery powered cars are expensive as well, and most of their energy is wasted trying to move the battery portion of the car’s weight.

The Internet Boom

The second factor in this recession is the boom-bust cycle. The internet boom of the nineties and early 2000s was naturally followed by a bust. Though this boom has traditionally been linked to liberal policies, do not be fooled. The invention of the internet created a large boom as a new way to advertise, communicate, and gain information rose. A bust naturally followed.

Economic Panic

The third factor in this recession is the press. Yes, when people hear that the economy is turning down, they save their money and spend less. Yes, a panic like this lead to many recessions and depressions. The Great Depression began when the stocks (which had always only gone up steeply) began to turn down. The following panic resulted in people selling their stock. Naturally, stock prices fall. More people freak out and sell, etc.

Even before the stock exchange, there were panics. Freaking about the possibly of a large inflation problem, many people ran to cash their money in for gold, as allowed back then. There wasn’t enough gold to do this. This became the Panic of 1893.

So, the fear of a recession often leads to a greater one. The media spewing this around will lead to another depression, and, like the last depression, a whole new set of socialist programs.